Audit Reforms Promise Tense Accountant-Client Relations

By Evan Weinberger (August 14, 2013, 9:14 PM EDT) -- A Tuesday proposal from the U.S. accounting watchdog requiring auditors to disclose problems encountered during a review of corporate financial statements would likely give investors some valuable new insights, but it could also cause tension between auditors and their clients and give new ammunition to enterprising plaintiffs attorneys.

The Public Company Accounting Oversight Board's proposal would require auditors to reveal "critical audit matters" that arise during a regular, annual review of a public company's financial statement as part of a broader change to the standard audit report requirements.

According to the PCAOB, the goal is to increase the amount of information...

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